Owning a small business is like herding cats. There are tons of details to keep track of and never enough hours in the day to get everything done. And one of the most important parts of any business is payroll.
After all, everyone wants to get paid! That’s why making sure employee payments get made on time should be a major priority for every business owner.
Let’s take a look at some types of payments you can use to keep your business running efficiently and keep everyone happy!
6 Types of Employee Payments to Consider
When you’re planning your business strategy, don’t forget one important thing: Your workers need money!
Employee payments extend further than just the traditional paycheck. Here are 4 types of payments that you can offer your employees.
1. Issuing Paychecks
This is traditionally the most universal method for making payroll payments. With paychecks, you don’t have to hand out cash, and employees don’t have to have a bank account.
For small businesses, providing a paycheck for each employee can be time-consuming, or you’ll need to outsource the process to a payroll payment service.
However, with more businesses using cheaper and automated digital solutions for payments, Paychecks are quickly finding themselves an ‘old world’ method for payments.
This is especially the case when being compared to other methods like Paypal and Payoneer.
2. Direct Deposit Payments
Each year more and more employees are choosing direct deposit as their payment type of choice. After all, they don’t have to do anything or worry about running a paper check to the bank on payday. The money goes directly to their bank account and is immediately available.
This is by far the fastest and most efficient way to get paid. The only thing that’s required of the employee is to be able to provide the employer their checking account number and the bank’s routing number.
Online payroll software like a fake paystub generator can streamline the process, and keep in mind that if you don’t have this kind of specialized software you’ll likely have to pay a small fee for each direct deposit. These methods are often used to verify income statements when setting up a new account or applying for a loan.
Overall, this process is simple, fast, and convenient.
2. Cash Payments
Paying your employees in cash is another option, but you’ll need to keep very good records because this can make the IRS suspicion about your taxes.
Many employees prefer being paid in cash because they don’t have to deal with a bank, and yet you are still required to take out taxes and maintain records of each payroll payment. There are really very few instances where paying employees with cash is the best option.
We all know cash is king, but when collecting payments online, this just isn’t a viable solution. This is especially the case when looking to hire freelancers or designers.
However, cash is still one of the most common ways to make or receive payments in smaller localized markets and 9-5 side jobs.
For online businesses, SaaS platforms, and freelancers, Paypal is still one of the best ways to send and receive payments online.
The reason why Paypal is so widely accepted and loved, is that it makes the process of getting paid so easy.
With Paypal being the backbone for many global payments through platforms like eBay, Etsy, and millions of others — it’s a standard that is now accepted across all platforms.
For employees and businesses, making payments through Paypal is great for many reasons, such as being able to pay with a credit card, connecting payments to a bank account, and also using the Paypal Working Capital as a way to fund the company should it need a loan for growth or excessive spending.
Other benefits of using Paypal (for businesses, or as an employee) include:
- Scale: A payments partner that can support your growing business and help you sell across multiple markets and platforms.
- Conversion: PayPal is the most-used digital wallet. Shoppers complete their checkout 88% of the time on average, helping you close more sales.
- Security and Confidence: Get the products that work for your business from a partner that offers Seller Protection and fraud monitoring.
- Live Customer Support: You can speak with a live representative if you need help with the merchant services your business depends on.
Many of these benefits will also come in handy for freelancers and employees as well. Paypal offers a debit card and for payments to be deposit right into user’s bank accounts as well.
5. Payroll Cards
Payroll cards have become increasingly popular in recent years because you don’t have to keep up with cash, or print new paychecks during every pay period, and employees don’t need bank accounts to make the deposit.
The setup costs are similar to using direct deposit, but there are also advantages. Payroll cards allow an employer to simply load the money onto an employee’s card each pay period. This saves you money on the cost of supplies.
It also saves your employees from having to go to the bank, and the employee can withdraw money at any ATM at their convenience.
Similar to Paypal, Payoneer is another payments solution that is quickly being accepted by freelancers and employees around the world.
Some of the most common reasons and benefits why employers and freelancer enjoy using Payoneer as their financial platform include:
- No bank account required for an account
- Super fast platform for receiving payments
- Withdraw payment to any local currency
- Send money to friends and family without fees
- High-quality customer support and user friendly
Payoneer is also very friendly towards affiliate marketing partners and companies that are working directly with site owners, affiliates, and bloggers. You can see some of their top payment partners listed below.
With digital employee payments and transactions on the rise, Venmo is another name you are probably hearing a lot more in daily life.
Similar to Payoneer and Paypal, Venmo acts as a digital wallet that makes online payments easy, and also include the following benefits.
- Pay from a bank account, major debit cards, or your Venmo balance.
- Free to receive money.
- Free to send money when using certain debit cards.
- Freelancers can get money to their bank accounts within one business day.
- Sign up with Facebook or email.
You can learn more about their platform by visiting their site and seeing if their terms and conditions align with yours as an employee, or a business.
Dolla Dolla Bill Y’all!
At the end of the day, we all want to be paid what we are owed — and at the time we are supposed to receive payment.
Employee payments are an essential part of doing business. These different ways to pay employees offer business owners plenty of flexibility. After all, every business has different needs.